Brands, Packaging Benefit HBC

With healthcare capturing so many headlines these days, the health and beauty category (HBC) has taken on added importance in the c-store set. Fueling much of the growth: smaller package sizes that save shoppers money and stimulate impulse sales.

Medford, Ore.-based Minute Market has jumpstarted its HBC sales by mixing in smaller-sized packaging, according to buyer Phyllis Simpler. The chain’s 11 stores devote a pair of four-foot sections to HBC.

A lot of the items that Simpler had been unable to get in the past are more readily available. “For example, baby diapers now come in a two-pack because big packages are so expensive, and with the economy the way it is it’s hard for parents to pay that kind of money,” she said.

When it comes to cold remedy Airborne, Simpler noted, “instead of having to buy the big pack we can buy a one- or two-tab Airborne. You can also buy a smaller package for Orajel.”

The bigger sizes have always been expensive, so the smaller packages have helped increase impulse sales. “Consumers are probably paying a little bit more with the smaller sizes, but when it’s a price they are comfortable with, they think they are getting a good deal.”

Minute Market executives are not marketing the smaller sizes per se, Simpler said, but merely letting consumers find them. The chain’s distributor, McLane, meets with her quarterly to discuss new products and planograms. “As a result, our offering is always up to date,” she said.

Evaluate HBC SetsYears ago, Simpler recalled, when Minute Mart was working with another distributor, it had a difficult time finding smaller packages.

“Following a category management analysis,” she said, “we noticed that the HBC section, dollarwise, was dropping. Sales of items that were available in smaller-sized packages, though, were rising. So we contacted them and said, ‘What do you have in smaller sizes?’ They told us about all the little packages that they h

ad available and we said, ‘Well, we don’t want to carry the big ones anymore because we have no movement and the products are expiring.’”

In the first 30 days after the section was reworked, Minute Market found they had earned higher gross margin dollars off of the small packages than they had with the previous set-up and the large packages.

One caveat is that results will vary depending on the demographics of the surrounding community. “Going with smaller sizes to allow shoppers to save money would not work, for instance, in a high-end neighborhood. But it does work with lower-income, blue-collar neighborhoods,” like those Minute Mart services,” Simpler said.

Since economic fortunes may rise and fall, Simpler makes the case that retailers need to base their strategies on customers, not market trends.

“You have to still look at what your consumer is buying. That’s why today, more than ever, I feel personally that you need to be looking at what your customers are telling you,” Simpler said. “In all of our locations we have product want lists that managers turn in monthly. If we see we have several stores at which a customer is asking for a particular item for that section, we would put it in.”

Pharmacies and HBCThe equation is somewhat less clear cut at Quick Chek Food Stores in Whitehouse Station, N.J., since 12 of its 120 stores include full-fledged pharmacies.

“I have two different sets of information to look at from two different distributors,” said June Connolly, Quick Chek’s HBC category manager. “The two parts of the store have surprisingly little in common. Our c-stores have a three-foot planogram and our pharmacies are full departments, so it’s really hard to compare the two sections. The HBC category in general is complicated because UPCs change overnight.”

The products that sell best in Quick Chek’s traditional c-store HBC section are what Connolly refers to as “family planning” items, or more specifically condoms, “which is really the extent of the family planning products we carry,” she said. Other top sellers are seasonal, such as Hall’s cough drops during the winter months.

“It’s a small set, but I like to think I’ve got a nice variety of what the customers are looking for,” Connolly said. “Obviously they’re not impulse items, but if they need something specifically in the middle of the night, like an analgesic, or someone passing through needs to pick up a shampoo, we can cover their needs.”

Quick Chek changed its strategy last year, deciding to go with more of the travel-sized items. “I made the shift very carefully, making sure I also kept the standard-sized package that the customer is looking for, as well,” Connolly said. “I personally think the category is recession proof. You can get that customer who is coming in who may not normally buy HBC from you, but now they’re doing one-stop shopping. There is also the regular customer who comes in, knows that you carry it, and says to himself, ‘I know this is here so I can get this while I’m here.’”

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